MEDICAL GROUPS;MEDICAID DENIALS PUT OHIO CLINIC IN LEGAL FIGHT

Medicaid advocates in southeast Ohio say it shouldn't be so difficult for poor people in rural Appalachia to see a doctor. They could be right.

But instead of assailing the Medicaid system, they've attacked the area's largest physician group.

Three Medicaid patients from rural Vinton County, Ohio, filed a class-action lawsuit against Holzer Clinic, an 85-physician multispecialty group based in Gallipolis, Ohio.

They claim the clinic illegally discriminated by refusing to give them appointments because they lived outside the five counties where the clinic has offices.

Holzer has no residency proviso for patients who have private insurance or pay out of pocket.

Nothing in Medicaid law prevents doctors from limiting the number of Medicaid patients they see or rejecting Medicaid business altogether. Indeed, many do just that.

But Southeastern Ohio Legal Services, a Columbus-based legal aid group that represents the plaintiffs, posed an unusual argument. It claimed the clinic violated the 1975 Equal Credit Opportunity Act, which prevents discrimination in lending on the basis of gender, race, age or receipt of public assistance.

The plaintiffs argued that by seeing a physician and agreeing to be billed, a patient is seeking credit. They said that by rejecting certain Medicaid patients, Holzer discriminated.

The clinic insists that's absurd.

"It's a stupid application of the law," said its attorney, David Selcer, who's with the firm Baker & Hostetler in Columbus. "They're trying to say that no doctor can turn away any Medicaid patient."

A federal judge agreed the law didn't apply. U.S. District Judge Joseph Kinneary in Columbus ruled in the clinic's favor, dismissing the case last fall. The plaintiffs have appealed to the 6th U.S. Circuit Court of Appeals in Cincinnati. A hearing has yet to be scheduled.

He said Holzer already takes more than its share of Medicaid patients-22% of its patients are Medicaid, compared with 17% of the local population-because some physicians reject Medicaid altogether. "They say, `Send them to Holzer,'*" Stafford said.

"The issue that we feel so crummy about is that we have been trying very hard for decades to do the right thing, and our thank you is that we've been dragged into court," he said.

Nevertheless, Holzer has been given a special incentive to serve Medicaid patients in its service area.

Thanks to a provision in Ohio Medicaid regulations, Holzer receives 40% more than regular Medicaid rates for services rendered at its main clinic in Gallipolis. Holzer is the only physician practice in the state that qualifies for the rate boost.

A spokesman for the Ohio Department of Human Services said the provision, enacted in July 1994, was meant to reward Holzer for providing outpatient services for Medicaid patients in the region because there is no hospital-run outpatient clinic. The extra 40% brings Holzer in line with hospital-run clinics, which receive disproportionate-share funds.

Stafford said the clinic's rate agreement with the state enables it to hold down rates for other patients. "If Medicaid paid anything close to fee-for-service, we could split the difference and lower the fees by a third to everybody," he said.

Plaintiffs' attorney Gary Smith said Medicaid rates are irrelevant to the case.

"If physicians do not believe that they receive adequate compensation from Medicaid, they should be going to state legislators and saying, `You need to pay us a decent rate for Medicaid patients,"' he said.

As each side files another round of briefs, special-interest forces are taking sides.

The American Association of Retired Persons, the Ohio chapter of the National Organization for Women and the Columbus chapter of the National Association for the Advancement of Colored People filed friend-of-the-court briefs disagreeing with the district judge's decision.

On the clinic's side, the American Medical Association, the Medical Group Management Association and the American Group Practice Association are filing a friend-of-the-court brief. They say many clinics would go broke if they were forced to take unlimited Medicaid patients.

The case is a symptom of access problems that policymakers continue to neglect.

Tim Size, executive director of the Rural Wisconsin Health Cooperative and a policy board member of the National Rural Health Association, said Medicaid pays radically below cost in most states, and rural clinics often can't make up the difference.

"The issue ought to be better access in that part of Ohio. Something's not working," Size said.